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Here's How to Make Triple-Digit Returns in Emerging MarketsBy
Tuesday, June 11, 2013
I did something at the end of 2008 that I've never done before... or since...
I took out a home equity line – I borrowed money – to invest in stocks.
I wouldn't normally do this, of course...
The thing was, the opportunity in certain stocks at the end of 2008 was just too great to pass up...
At that time, I scoured the globe, looking for opportunity. I found it... I ended up making a large investment in an India hedge fund. I more than doubled my money – after fees – and then sold. I owned that India hedge fund for just over a year.
I tell you this story because the stock-market opportunities in emerging markets like India today might just be even better than they were when I bought at the end of 2008.
I am astounded at the values I'm seeing in emerging markets today. The biggest blue chips from Russia to China are trading at less than 10 times earnings and at discounts to book value.
If you want to make triple-digit returns – which you can definitely do in emerging markets – you need to start from values like these.
Obviously, I'm excited about the investment potential in emerging markets...
The thing is, my True Wealth Systems computers tell me that now is NOT the time yet in emerging markets...
True Wealth Systems is a trading service that distills my decades of investing experience into a few dozen computer trading models. And right now, these models say you shouldn't be in emerging markets in general... In particular, they told us to sell out of India and other Asian markets, like Singapore.
It's been like this most of the year... I keep trying to buy emerging markets, and the True Wealth Systems computers keep telling me I'm too early.
The computers have been right, and I have been wrong.
Our computers are waiting on the uptrends in these markets before buying.
U.S. stocks are up by double digits percentage-wise this year. But stock markets in many emerging markets are down by double digits in many countries.
Heck, in some of these emerging markets, the declines are accelerating. There is no bottom in sight, yet.
In sum, I have two points for you today:
I think you'll have the opportunity for triple-digit profits in emerging markets very soon... but it's not time to buy yet. Good investing,
Steve
Further Reading:
As regular readers know, Steve thinks there's a huge opportunity setting up in Russia, once the uptrend begins. Read more here:
Where the "Adventure Capitalist" Is Buying Now
Japanese Stocks Are up 40% in Five Months... Who's Next? Of course, emerging markets are volatile and not for conservative investors. "Russia is risky, and speculative, in the best of times," Steve writes. "You can make a lot of money, or you can lose a lot of money."
Market NotesAN INTERESTING UPDATE ON THE U.S. CONSUMER Despite many claims to the contrary, the U.S. consumer is not dead. As today's chart shows, he's actually staying very busy...
Read financial newsletters or watch CNBC for a week, and you're bound to come across claims that "the U.S. consumer is tapped out" or that his "credit card has been declined." There's a cottage industry of predicting the demise of the U.S. consumer.
One way to monitor this demise, or lack thereof, is with the S&P Retail Fund (NYSE: XRT). This fund is comprised of consumer stocks like Netflix, J.C. Penney, Best Buy, Whole Foods, Tiffany, Macy's, Saks, and Men's Wearhouse. This fund rises and falls with America's shopping habits.
As you can see from the chart below, America is shopping... and XRT is in a big bull market. Shares have climbed from $50 in late 2011 to $78 (a 56% gain). They sit near a yearly high. As long as this bull market runs higher, we have to say that "rumors of the consumer's demise are greatly exaggerated."
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